Labor Secretary Patrick Pizzella knows he is likely to be demoted by the Trump administration before the end of the year, but doesn’t mind. He is, in fact, eagerly helping the process along by setting things up for his expected replacement, Eugene Scalia, the former Labor Department solicitor under the Bush administration.
Pizzella is only the department’s acting secretary and still views himself as the deputy secretary. He took over after Alexander Acosta stepped down in July, but still does mostly the same work: presiding over the administration’s deregulatory agenda.
Pizzella laughs off a question about whether he is keeping the seat warm for Scalia. “The seat isn’t being kept warm. It’s vacant. His office is down the hall,” Pizzella said, noting that he works out of the same office as he did before.
Senate Democrats have slowed the confirmation process, and the lack of a full team of Trump appointees has hampered bureaucratic change, Pizzella says. But the administration has a deep bench, Pizzella argued, and can push forward.
“The thing I like to cite the most is that last fiscal year the Wage and Hour [Division] had the largest recovery of back wages in its 80-year history: $304 million,” he said. It was the first time the administration ever exceeded the $300 million mark. Pizzella noted that it did that with fewer investigators and without a confirmed head of the division. The Senate took more than 500 days to confirm President Trump’s pick to run the division, Cheryl Stanton. “But we have her now, so we’ll see how we do in Fiscal Year 2019,” he said.
The department is busy revising Obama-era rules, pushing forward with new apprenticeship programs, and doing anything else the administration can do to make it easier for businesses to hire.
“Every regulatory item we have finalized in the last two-and-a-half years has been to relieve some part of the burden on the regulated community so our economy can grow,” he said. “All of the regulations we are discussing now are in this deregulatory mode — to free up the job creators and the risk-takers.”
The administration’s revamp of the rules covering overtime is expected in September. The proposal would require that all workers earning up to $35,000 annually be eligible for time-and-a-half once they pass 40 hours in a week, up from the current threshold of $23,000. Management can exempt workers above the threshold.
The Obama administration attempted to set the threshold at $47,000, but its 2014 rule change was struck down in federal court before it could go into effect. The matter was unresolved when the Trump administration took office, so it decided to rewrite the overtime rule itself.
“This is going to be an opportunity to actually extend overtime pay to a healthy amount of Americans who are not covered. It’ll be the first update in over 15 years,” Pizzella noted.
The administration wants to avoid its predecessor’s mistake and create a new version that will withstand legal challenge. The courts ruled the previous rule change was so extensive that it required congressional authorization. The Trump administration is taking a more measured approach. “The shortcuts they took, we didn’t want to pursue that at all. We wanted a robust and defensible approach to what is produced,” Pizzella said.
The current administration is similarly plowing forward on a revamp of the “joint employer” rule. Joint employer refers to a situation in which one business can be held liable for workplace violations at another business. Traditionally, this required the one business to have direct control over the other. The Obama administration had sought to make businesses liable even if they merely had “indirect control,” a much vaguer standard that business groups objected to. The Trump administration is working to restore the earlier direct control standard.
“Again, we are trying to be very thorough and thoughtful because we fully realize that those who disagree with what ends up coming out will rush to the courthouse steps, and we want to be prepared,” Pizzella said.
That also goes for the coming revamp of the Labor Department’s fiduciary rule, meant to prevent conflicts of interest in investment advising. Last year, a federal court threw out the Obama administration’s version, which required all investment advisers working on tax-privileged retirement accounts to act as fiduciaries, meaning that they would be legally required to act in their clients’ best interests. The current White House is preparing its own version. “Between now and the end of the calendar year, you are a going to see a lot of things addressed,” Pizzella said.
The Trump administration’s biggest project is a revamp of federal apprenticeship programs. “We have 6 million people chasing 7 million vacant jobs. We need to update the program,” Pizzella said. The administration wants to harness industry expertise to fill these slots. Democrats have been wary, fearing the “industry-recognized apprenticeship programs” will draw money away from the existing “registered apprenticeship” programs, which are largely run by states.
The acting secretary sees no reason why they can’t have both, noting the administration gave $73 million to state apprenticeship programs in the last fiscal year and has earmarked an additional $100 million for efforts to further expand apprenticeships. Just two fiscal years before, the Obama administration gave out only $61 million to registered apprenticeship programs.
